Xbox Game Pass Price Hike & $300 Million Call of Duty Loss Explained

Introduction

In a surprising twist for the gaming industry, Microsoft’s Xbox division has faced a major financial hit after integrating blockbuster titles like Call of Duty: Black Ops 6 into its Game Pass subscription service. According to Bloomberg, Xbox reportedly lost over $300 million in potential sales on consoles and PCs in 2024 alone. This shortfall has been a key reason behind the 50% price increase for Game Pass’s top-tier plan, now costing subscribers $30 per month.

The price hike sparked immediate reactions from gamers and industry figures. California Governor Gavin Newsom attributed it to past tariffs, while GameStop humorously suggested buying physical copies instead. This situation underscores the tension between subscription models and traditional game sales.

Breaking: Xbox lost over $300 million in Call of Duty sales in 2024 by putting Black Ops 6 on Xbox Game Pass, Bloomberg reports

Call of Duty's lost sales is one of the key reasons why Game Pass price has increased pic.twitter.com/OqSeAUZds5

— CharlieIntel (@charlieINTEL) October 3, 2025

How Game Pass Affects Sales

Launched in 2017, Xbox Game Pass offered unlimited access to a library of games at a flat monthly fee, initially $10. By 2018, Microsoft began including day-one releases of its own titles, a move debated internally due to potential cannibalization of full-price sales.

The inclusion of Call of Duty: Black Ops 6—the franchise’s largest launch—highlighted the strategy’s drawbacks. While the game topped US charts, 82% of sales occurred on PlayStation, where it wasn’t part of a subscription. On Xbox, many chose Game Pass instead of buying the $70 game outright, resulting in the reported $300 million revenue gap.

Analysts note that while subscription revenue rose 16% industrywide, Game Pass subscribers often cancel after short periods, unlike one-time purchases that guarantee ownership. Former Xbox VP Shannon Loftis observed that Game Pass adoption can come “at the expense of retail revenue”, though it helps lesser-known games gain exposure.

Broader Financial and Industry Challenges

Despite profitability, with revenue near $5 billion in FY 2025, Xbox faces slower subscriber growth. Growth slowed from 80% (2020–2021) to 36% (2022–2024), with 34 million users reported in February 2024.

Microsoft has responded with cost-cutting, including 650 layoffs in Xbox in September 2024, after earlier 1,900 cuts and cancellation of at least four games. The gaming industry as a whole struggles with stagnation, as players stick to established titles. Microsoft CFO Amy Hood urged Xbox teams to explore alternative profit avenues. Critics, including former FTC Chair Lina Khan, warn that Activision acquisition effects have driven price hikes and job losses, impacting both consumers and developers.

New Game Pass Pricing Tiers

On October 1, 2025, Xbox introduced three updated tiers:

• Essential: $10/month for ~50 games
• Standard: $15/month for 200 games
• Ultimate: $30/month for 400+ games, including 75 day-one releases like Call of Duty: Black Ops 7 and The Outer Worlds 2

This tiered approach allows more flexibility but may alienate budget-conscious gamers. Microsoft emphasizes choice:

“We know not everyone wants the same thing in their Xbox experience, so we’re evolving Game Pass to offer more flexibility, choice, and value to all players.”

FAQs

Q1: Why did Xbox Game Pass increase in price?
A1: Xbox lost over $300M in potential sales due to high-profile titles like Call of Duty being included in Game Pass. The price hike helps offset revenue loss.

Q2: How does Game Pass impact traditional game sales?
A2: While subscription revenue grows, many players opt for Game Pass over buying full-priced games, reducing retail sales for Xbox titles.

Q3: Are all Call of Duty games included in Game Pass?
A3: Only select titles like Black Ops 6 are included at launch, while others may remain as separate purchases.

Q4: Will the new Game Pass tiers benefit gamers?
A4: Yes, they offer more choices and access to larger libraries, but premium content is gated behind the Ultimate tier.

Q5: How does Xbox compare to competitors now?
A5: While Game Pass strengthens subscription revenue, PlayStation and Nintendo maintain strong hardware dominance and full-price game sales.

Conclusion

The $300 million Call of Duty loss highlights a crucial dilemma in the gaming industry: balancing subscription-based models with traditional game sales. Xbox Game Pass offers unmatched value and convenience, yet the revenue trade-off cannot be ignored.

For Microsoft, the challenge is clear: grow subscription revenue while maintaining profitability from high-margin titles. The 2025 price adjustments aim to stabilize finances, but long-term success will depend on innovative strategies, consumer trust, and the ability to attract new gamers without alienating existing ones.

This scenario serves as a lesson for the entire gaming industry: blockbuster titles can drive subscriptions, but overreliance on such models may undermine traditional revenue streams, creating tensions between business sustainability and gamer satisfaction.